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Harsh reality catches up with F1

By Adam Parsons
BBC sports news correspondent

Jenson Button and Honda endured a torrid 2008 season

Formula One is not always awash with cash, but it often looks that way.

It is a sport that likes to portray itself as endlessly sophisticated, advanced and monied. Fortunes are spent on outrageously advanced racing cars, millions invested in the pursuit of split seconds. Yet now, the money tap is being twisted shut.

The announcement that Honda's F1 team is to close has put the wind up the sport.

On the one hand, there is genuine sadness that so many hundreds of people seem likely to lose their jobs. On the other, there is a fear that if this extraordinarily well financed team can collapse, then almost everyone is in jeopardy.

Put simply, Honda is pulling out of the sport because the company can no longer justify the huge sums it has spent on some very sorry results.

Accurate figures are hard to come by, but I am told the total budget for the team's operations in Britain and Japan comes to just short of $500m (£341m).

The credit crunch has affected the rest of the world, and now it is changing the cosseted world of Grand Prix racing

Imagine that for a moment - you spend almost half a billion dollars on developing two cars, testing them, and employing two famous drivers. And you end up with 14 measly points.

Of the nine teams who scored points over the course of the season, you are ninth. The only team below you is the one that scored zilch.

So what does that tell the world about your team, and about your company?

That you spend a lot of money in the pursuit of success, and then fail; that you can't resolve problems. That you are, to be brutal, a company associated with defeat. You damage your brand, and you spend half a billion bucks in the process.

But, remarkably, in times of financial plenty, road-car manufacturers were willing to take all of that flak in the hope that things would improve, that a car that has driven like a brick for a season will be reborn for the next as a sleek race-winning thing of beauty.

But not now. The credit crunch has affected the rest of the world, and now it is changing the cosseted world of Grand Prix racing.

Honda's decision could leave just 18 cars on the F1 grid next season

So Honda's beleaguered team are up for sale. Of course, we all hope someone buys it, to save those hundreds of jobs, and there are rumours that Ross Brawn, the team's technical director, is already confident of delivering a deal.

But while my admiration for Brawn is enormous, it is also true that most in the sport would be surprised if a purchaser does come rushing along.

Even if Honda do want only a nominal pound coin for their team, who has the money, resources and desire to take on an operation like this? The overheads are huge, the running costs mighty, the record of success dreadful.

And even if you were interested in taking on an F1 team in the hope of achieving great things, it would surely cross your mind that Honda failed with a budget that would make Bill Gates wince.

In a time of global economic turmoil and shrinking marketing budgets, it is hard to imagine who is pining to invest untold millions into a mediocre racing team.

If this all sounds rather harsh, then so it should, because there is a harsh future ahead of this wonderful sport.

Mosley believes F1 needs to make hard choices to survive stormy times

I heard a story on Thursday of a team principal who went to see his board to discuss his budget for the coming season, hoping for a modest $20m (£13.6m) increase. He left the meeting with a decrease of $40m. Things are changing.

Except, perhaps, at McLaren and Ferrari, where consistent recent success, massive expenditure and effective management may combine to offer an insulation.

Sponsors will always prefer to back a winning horse, so while the silver and red cars may charge premium prices, they often deliver the best results.

But what happens if they keep spending heavily, while the rest of the teams start cutting their costs? Do we end up with a sport where two teams have huge budgets, and the rest are fighting for the minor places?

It is a worrying prospect, particularly if F1 commercial supremo Bernie Ecclestone's idea of gold, silver and bronze medals means only the top three really score any points.

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